Product substitution and increased material efficiency in the energy-intensive primary industry

Definition of products subject to the EU ETS, development of a database with specific parameters and determination of CO2 cost components along the value chain for selected case studies.

Client: 

German Environment Agency (UBA)

Duration: April 2019 – June 2021

Background

Since the start of emissions trading in 2005, the EU ETS sector has reduced about 26 percent of its CO2 emissions by 2017. In view of the necessary annual reduction requirements in the emissions trading sector of at least 48 million t CO2-eq. by 2030, the question of the reduction potentials of industrial sectors is of growing importance. Therefore, the question is increasingly raised as to what contribution changes in demand and production of CO2-intensive goods can make to mitigation, and, in connection with this, the potential for product substitutions or increases in material efficiency. Although the latter two are often mentioned as possible options, so far little literature is known that provides an overview of the significance of such changes in demand for the respective industrial sectors in Germany and Europe.

In order to be able to pursue possible analyses of such demand-side options for reducing greenhouse gas emissions from industry, the data basis must first be improved. In order to be able to estimate the impact of such options on GHG emissions reliably, corresponding product-related emission balances are necessary, which are not yet available. The aim of this project is to establish a solid information and database for the Federal Environment Agency on CO2 emissions and the economic significance of various products that can be attributed to the industrial activities and sectors covered by the ETS. For this purpose, a comprehensive picture of the available data is provided, and these are prepared accordingly for further use by the client.

Project goals and results

The aim of the project is to establish a solid information and data base for the Federal Environment Ministry on CO2 emissions and the economic importance of various products that can be attributed to the industrial activities/sectors covered by the ETS.

Tasks of IREES

  • Identification of the products produced by the activities covered by the ETS.

  • Determination of the cumulated CO2 emissions, economic parameters and, if applicable, central input cost components of the central production steps for these products.

  • Determination of the relative importance of the products regarding their emissions and economic relevance Determination of relative CO2 cost shares, e.g. at the BWS of the value-added stageIn addition, IREES will be responsible for sub-project management of work package 3, where two case studies will be used to analyze the further processing stages outside the activities covered by the ETS, from at least one example to the end product. This includes a (MFCA-supported) estimation of the CO2 cost shares of the value added at the involved further processing stages.IREES also contributes to the formulation of policy recommendations and the design and conduction of two workshops

Project partner

  • Fraunhofer ISI (Project coordinator)